Senior figures at Benefit Street Partners pointed to stress scenarios within the software thematic of private credit as evidence of an upcoming ‘tsunami’ within the asset class, though also emphasised their own limited exposure to the sector.
Anant Kumar a global investment strategist at BSP, provided a macro-outlook for H2 2026 alongside insight into managing AI disruption within portfolios.
He pointed to BSP data showing that syndicated software loan spreads are back in stress territory, with those alternatives firms overexposed in the sector facing losses as developments in AI cause volatility.
Kumar says: “When you think about the wave, the tsunami that’s coming, that’s going to wash out certain firms. If you’re not positioned appropriately, if you had 50 per cent software exposure and it was into more horizontal software, that’s going to impact your track record for years to come.”
However, according to research by BSP, 93 per cent of institutional investors are planning to maintain or grow exposure to private credit this year, underlining continuing faith in the structural strength of the overall asset class.
Allison Davi, Co-COO at BSP, also stressed that the firm itself is not overexposed to software, with a platform exposure of 9.6 per cent.
“Institutional investor demand is still there (for private credit), though people are more selective, they’re pickier, and fundraise timelines have doubled over the past five years,” says Davi.
“The average fundraise now takes 18 to 24 months, and that is different than it ever used to be. That’s creating these dynamics that are a little bit tricky, where investors, knowing that fundraises are going to be long, it’s hard to get them to come into first closes, and that is hard for GPs to manage.”
BSP is an alts manager that is a wholly owned subsidiary of Franklin Templeton, and has $93bn in assets under management.
